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Background Information

One of the objectives of the Energy Union is a reduction of at least 40 % in CO2 emissions by 2030. There is a need for more renewable energy in the EU’s energy mix and for energy efficiency across all sectors.

According to the Energy Unions Citizen’s Summary the EU imports €400 billion of energy a year accounting for 53% of global energy imports. This makes the EU the single biggest energy importer in the world. There is a still an incomplete internal energy market, with some parts of the EU remaining isolated energy islands and renewable energy not fully integrated into the electricity system.

Diversification of energy sources and suppliers is a key means of improving our energy security. Exploring new supply regions for fuels, exploring new technologies, further developing indigenous resources and improving infrastructure to access new sources of supply are all elements that will contribute to the increased diversification and security of Europe’s energy sector.

A vital contribution to the objectives of the Energy Union is coming from the implementation of Horizon 2020, the nearly €80 billion EU Framework Programme for Research and Innovation. This financial support plays a significant catalysing and leveraging role to develop the secure, clean and efficient energy technologies of tomorrow.

Energy Storage

An “Energy Storage Facility” for the electricity vector means a facility used for the intake and stocking of electricity in different suitable energy forms. The release of this energy, at a controlled time, can be in forms that include electricity, gas, thermal energy and other energy carriers.

Energy Storage is a key component in the new energy system, providing required flexibility and enabling renewables to work in synergy with natural gas, distributed generation in balance with large power plants, and power generation contributing to the decarbonisation of the transport and industrial sector. Materialising such a vision requires strengthened research and innovation combined with a deep transformation of the way we ensure the functioning of the energy markets and the way services are provided and rewarded.

Energy Storage is playing an essential role in Europe’s Energy System. The vision of the new European energy market composed of a secure, sustainable energy supply, smart and flexible grids and educated prosumers is growing. One important step on the path to make this vision a reality remains the integration of Energy Storage into the system in a way that allows taking all benefits through its various applications.

The energy system has two challenges; one of them is cost-effectiveness, to enable economic growth, competitiveness and to make energy available for all. Energy Storage needs to be part of this, which is why the support of policy to RD&D is crucial. A second challenge is policy and regulation, which will have to ensure a fair market design, with the elimination of market barriers.

Demand Side Management

Through demand response, final consumers (households or businesses) provide flexibility to the electricity system by voluntarily changing their usual electricity consumption in reaction to price signals or to specific requests, while at the same time benefiting from doing so. This can be done either manually or automatically. In contrast to energy efficiency, which aims at using less energy while still providing the same service or level of comfort, demand response is mainly about shifting consumption to a different point in time.

To ensure stability on the electricity grid, electricity supply and demand must remain in balance in real time. Traditionally utilities have called upon peaking power plants to increase power generation to meet rising demand. Demand-side management (DSM), which includes energy efficiency and demand response (DR), works from the other side of the equation – instead of adding more generation to the system, it pays energy users to reduce consumption. Utilities pay for demand-side management capacity because it is typically cheaper and easier to procure than traditional generation.

Demand-side management allows energy users of all kinds to act as “virtual power plants.” By voluntarily lowering their demand for electricity, these businesses and organizations help stabilize the grid, and they are paid for providing this important service. Utilities and grid operators treat demand response capacity as a dispatchable resource that is called upon only when needed.

The 3rd Electricity Directive (2009/72/EC) as well as the Energy Efficiency Directive (2012/27/EU) have provided legal basis for the development of demand response in Europe. They require enabling demand response to participate in retail and wholesale markets according to its technical possibilities. Proper transposition of these rules at national level is key to enabling demand response. The European Commission has also recognised demand response as a key tool to better link wholesale and retail markets, as noted in its Energy Union Communication from February 2015.

The strategy underlines the need to rebalance energy actions in favour of a demand-driven policy, empowering consumers and decoupling economic growth from energy use. In particular, the transport and construction industries must pursue an active energy sav